MGM reports record revenue of $16.2B in full-year 2023, driven by growth in China

MGM Resorts International reported financial results for the quarter and year ended December 31, 2023. During Q4, the business saw net revenues of $4.4 billion, an increase of 22% compared to the prior year, driven by the relaxation of pandemic-related entry restrictions in Macau. Meanwhile, MGM saw net revenues of $16.2 billion in the full year 2023, an increase of 23% year-over-year.

Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts, said: "Our Las Vegas Strip Resorts and MGM China set new all-time records for full year and fourth quarter Adjusted Property EBITDAR."

"Our premium positioning and offerings in Las Vegas enable us to capture incremental profit during major events such as the inaugural Formula 1 race and our first Super Bowl. 2024 is off to a winning start with the launch of our Marriott relationship as well as opportunities to increase our convention room nights and international mix," he added.

The company recorded an operating income of $419 million in Q4 compared to an operating loss of $2 billion in the prior-year quarter. The turnaround was attributed to the increase in net revenues in the quarter and a decrease in amortization expense of $1.2 billion relating to the MGM Grand Paradise gaming sub-concession.

Net income attributable to MGM Resorts was $313 million in the quarter compared to $284 million in the prior year period. 

Bill Hornbuckle

Breaking down the results by region, MGM China recorded net revenues of $983 million in the quarter compared to $175 million in the prior year period, an increase of 462%, and an increase of 35% compared to the fourth quarter of 2019. The quarter was positively affected by the removal of COVID-19-related entry restrictions and an increase in visitation compared to the prior year's quarter, as well as an increase in authorized tables in 2023.

Adjusted Property EBITDAR was at $262 million in Q4 compared to a loss of $55 million in the prior year quarter, and marked an increase of 42% compared to the fourth quarter of 2019.

Meanwhile, in the Las Vegas Strip, the company registered net revenues of $2.4 billion in Q4 2023 compared to $2.3 billion in the prior year quarter, which marks an increase of 3%. Same-store net revenues (adjusted for dispositions) stood at $2.4 billion compared to $2.2 billion in the prior year quarter while adjusted Property EBITDAR decreased 1% to $864 million from $877 million in Q4 2022. 

In its regional operations, MGM clocked net revenues of $873 million for the fourth quarter down from $991 million in Q4 2022, a decrease of 12% partially attributable to the effects of the union strike at MGM Grand Detroit and a decrease in high-end table volume at MGM National Harbor, as well as due to the disposition of Gold Strike Tunica.

Diluted earnings per share were at $0.92 in the fourth quarter compared to $0.69 in the prior year quarter. Adjusted diluted earnings per share stood at $1.06 in the fourth quarter compared to a loss of $1.54 in the same period last year. The company clocked a consolidated Adjusted EBITDAR of $1.2 billion.

Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts, commented: "Yesterday, we closed on an amendment and extension to our senior secured credit facility, providing us with $610 million in additional capacity and extending the maturity by over two years to 2029.

"We continue to see great value in our shares and are returning capital to shareholders by repurchasing our shares. We have already bought back approximately 6 million shares for an estimated $249 million year-to-date, adding to the approximate 54 million shares that we repurchased in 2023, totaling $7.1 billion of repurchases since 2021," he noted.

Full Year overview

Group revenue in 2023 amounted to $16.20 billion. This was 23.7% ahead of the previous year amid growth across two key markets: Las Vegas and China.

Las Vegas remains the primary source of revenue for MGM, with revenue here rising 4.8% year-on-year. This was helped by the acquisition of The Cosmopolitan in May 2022 and the impact of major events in the city, including the inaugural Formula One race in November. 

However, MGM China reported the most growth during 2023. MGM put this down to the removal of all Covid-19 restrictions, with these having impacted its performance in 2022.

The business noted some decline in its Regional Operations business, but this was more than offset by growth in the “management and other operations” segment. This includes BetMGM, the joint venture with Entain, which hit full-year targets and expanded outside the US by going live in the UK. Last week, BetMGM also struck up a partnership with X.

Breaking down the 2024 performance, casino activity was by far the main source of revenue at $8.09 billion. Additionally, room revenue hit $3.50 billion, while food and beverage was $2.89 billion, and entertainment, retail, and other $1.64 billion. A further $45.7 million was noted in reimbursed cash.

Las Vegas Strip revenue topped $8.80 billion for the year, up 4.8% from 2022 on the back of a busy year in Nevada. As for China, MGM noted significant growth in Macau, with revenue rocketing 368.1% to $3.15 billion.  

Regional operations revenue slipped 3.8% to $3.67 billion for the year. This was partly impacted by the sale of operations at Gold Strike Tunica Resort in Mississippi to CNE Gaming Holdings in February.

In terms of operating costs, spending increased 23.2% to $14.21 billion in 2023. General and administrative costs were the main outgoing at $4.70 billion, ahead of casino spending at $4.32 billion. This pushed operating profit up 31.4% to $1.89 billion.

An additional $418.7 million was reported in non-operating costs, leaving a pre-tax profit of $1.47 billion, up 62.9% year-on-year. MGM paid $157.8 million in tax and discounted $172.7 million in profit from non-controlling interests. As such, the company ended 2023 with a net profit of $1.14 billion. It was also noted that full-year adjusted EBITDAR at MGM amounted to $4.59 billion. 

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